Halcón pivots to Permian with $1.4 billion Bakken deal

(Reuters) - Shale oil producer Halcón Resources Corp said on Tuesday it would sell most of its North Dakota operations for $1.4 billion cash, part of a plan to shift its focus to Texas’ Permian Basin, the largest U.S. oilfield.

The deal with privately held Bruin E&P Partners LLC focuses Halcón on the most-active area in the U.S. oil industry and marks a stunning turnaround for Chief Executive Floyd Wilson, who formed the company in 2011 before having to usher it through bankruptcy in 2016 after oil prices plunged.

The news sent Halcón shares up more than 35 percent in morning trading.

The deal also highlights the ability of U.S. shale producers to survive and reinvent themselves, despite sliding crude prices in the past two years.

“The sale of our Williston Basin operated assets transforms Halcón into a single-basin company focused on the Delaware Basin where we have more than 41,000 net acres,” Wilson said in a statement.

Houston-based Halcón will sell its operated North Dakota assets, which produce about 29,000 barrels per day (bpd). Halcón will keep its non-operated interest in wells across the state and said it may sell them in the future.

After the sale, Halcón will produce about 7,500 bpd and run two drilling rigs in the Permian. By the end of the year, Halcón expects to pump about 13,000 bpd.

The deal is expected to close by August. If it collapses, Halcón would pay Bruin $42 million.

Bruin E&P Partners, which is backed by private equity firm Arclight Capital Partners LLC, did not immediately respond to a request for comment.

Halcón entered the Permian in January in several deals worth more than $1.2 billion, acquiring acreage in the western part of the region known as the Delaware Basin.

Focusing on the Permian could help Wilson achieve his long-held dream of selling Halcón to the highest bidder.

Investors and analysts have been eager to see if Wilson can replicate the feat he pulled off in 2011 when he sold Petrohawk Energy to BHP Billiton Plc for $12.1 billion, a 65 percent premium over the share price before the sale was announced.

Wilson had predicted in 2012 that a sale of Halcón would take place by 2015. But in 2013, with Halcón’s debt load mounting, he changed that time frame, saying any potential sale could come within “a few years.”

Reporting by John Benny in Bengaluru and Ernest Scheyder in Houston; Editing by Shounak Dasgupta and Meredith Mazzilli